I've been reading about the Elf on the Shelf on several boards and finally took the plunge.
I can NOT recommend this little guy (and book) enough if you "do" Santa in your house!
The concept is that this elf comes to live with you and leaves your house each night to repot to Santa on your child's behavior. Each morning the kids delight in searching for where his new location is. (you move him each night to further the appearance of the magic)
The kid(s) name the elf with the first reading of the book.
Ours is Loca-Zah-Zee (courtesy of the 2 yr old)
They're LOVING this AND in 2 days I've already heard both of them say "We need to be nice, Loca-Zah-Zee is gonna tell Santa if we're naughty!"
LOOOVE this tradition!!!